Clean Energy

BPU Audit Shows Financial Impact

The BPU received its 2019 audit, which detailed the impact of the Clean Energy Standard in 2018 on the city-owned utility company. P-J photo by Dennis Phillips

Jamestown Board of Public Utility customers are paying more, and power expenses are increasing, because of the impact of the Clean Energy Standard.

On Monday, the BPU received its 2019 audit conducted by Freed Maxick, which analyzed the financial position of all five utility divisions — district heat, electric, solid waste, wastewater and water. According to the electric division’s audit, which has been posted online with the other divisions at, operating revenues increased by $3,028,459 mainly due to the increased Clean Energy Standard fees, which are passed through to BPU customers. Also, the cost of power expenses increased by $2,48,380, which was directly related to New York Clean Energy Standard fees for renewable energy credits and zero emission credits.

In March, David Leathers, BPU general manager, told the board that customers will pay $1.6 million more through the fuel adjustment surcharge to pay for Clean Energy Standard mandates. He said the last two rate case increases for the electric division in 2010 and 2016 combined to only increase what customers paid by $1.6 million.

As part of the state Clean Energy Standard that was approved by the state Public Service Commission in August 2016, state utilities are being charged zero emission credits to support the three nuclear power plants. The zero emission credits are estimated to cost ratepayers $7.6 billion between now and 2030, Leathers said in January 2017.

At the start of 2017, BPU customers also had to start paying toward renewable energy credits. This program cost BPU customers only around $3,000 in 2017. However, Leathers said in 2017 that the renewable energy credits cost would increase in future years.

Last month, Leathers said state officials also have changed its timeline since the Clean Energy Standard was passed in August 2016. He said now Gov. Andrew Cuomo wants 100 percent clean electricity by 2040.

In January, Cuomo announced the launch of a Green New Deal initiative. The plan outlined in Cuomo’s 2019 Justice Agenda calls for a “globally unprecedented” ramp-up in renewable energy deployments as New York seeks to achieve 100 percent carbon-free electricity by 2040, and ultimately to eliminate its entire carbon footprint.

In the BPU’s water division, operating revenues increased by $248,682 when compared to 2017. Residential consumption increased by 3.1 percent last year. However, commercial sales decreased by 2.1 percent.

For the solid waste division, operating revenues increased by $16,415, or 1 percent. Landfill tipping fees increased by $42,558, or 13.9 percent. World recycling marketing, primarily paper, impacted this increase.

The wastewater division operating revenues decreased by $55,454, or 1.1 percent. Residential sales decreased by $28,211; commercial sales remained consistent; municipal sales decreased by $14,598; and public authorities sales decreased by $1,876.

For the district heat division, heat sales increased by $175,004 or 14 percent while chillier sales were consistent with 2017.

As far as accounting practices done by the BPU, the audit report states the city-owned utility uses preferable accounting practices.

“The annual financial audit has been completed in a very timely manner again this year and the overall result is quite positive related to our financial reporting and our overall financial management,” Leathers said. “There were no reported material weaknesses or significant deficiencies. All audit findings were reviewed with staff, in detail with the board’s Finance and Capital Projects Committee members, and, also with the entire BPU board. Updated reporting responsibilities related to new accounting standards were included as part of this audit process. In summary, we are pleased with the results of this important annual third-party financial audit of our five utility divisions, and I appreciate the great work performed by our BPU employees to achieve these results.”